Dan Gardner gets it half right;
By September, if the new law comes into force, an average of five per cent of the fuel content of gasoline will have to come from renewable fuels made from corn or wheat. Long discussed, the government formally announced at the beginning of April that it would go ahead with the regulation.
Why wouldn’t they? Environmentalists love it because it will reduce emissions of the greenhouse gases that cause climate change. In combination with other regulatory changes, the reductions will be “up to about four megatonnes per year,” a government press release says, which is “the equivalent of taking one million vehicles off the road.”
Farmers and agri-business love the regulation, too. Mandatory biofuel content means a huge volume of guaranteed sales. That’s big money.
So the Conservative government wins praise from across the political spectrum. And, just as importantly, the Tories get to say they’ve done something big to fight climate change. What’s not to love? Group hug!
But then reality barges in and spoils the moment.
A week after the politicians in charge of the government announced the regulation was going ahead, civil servants working for that same government quietly published the results of a cost-benefit analysis of the regulation. By assigning a reasonable price of $25 per tonne of emissions, the analysts concluded the regulation would deliver $580 million worth of reductions over 25 years. On the cost side, the regulation will not only raise the price of gasoline, but it will also require the construction of new plants and infrastructure. Total bill: $3.2 billion.
So it will deliver $1 in benefits for every $5.50 it costs. Impressive, isn’t it?
And we don’t need no stinking carbon tax, either, Dan.
But that’s not all! Let’s flashback…
Trouble is, a gallon of ethanol is 30 percent less efficient than a gallon of gas meaning that the more ethanol you mix in, the worse your gas mileage. Department of Energy studies show steadily decreasing fuel economy as ethanol blends rise from so-called E10 (fuel composed of 10 percent ethanol and 90 percent gas) up through E15 and E20 — with E20 suffering a 7.7 percent fuel efficiency loss.
Yet DOE’s green-zealot-in-chief Steven Chu still favors an increased mix of ethanol. So while automakers are sweating under the federal gun to make increasingly fuel-efficient engines, the government is mandating they do it with less-efficient fuel.
Not content with putting car companies out of business? Wait until you find out what our trusty governments are doing to your local auto body repair shop. Or shall we say – the one you used to have. More on that later.
